Education Loan in India

Delhi Govt’s educational loans to students will help expand facilities & improve quality of institutions

The launch of the Education Loan Guarantee Scheme by the Delhi government to enable students of all universities, colleges, technical institutes, skill centre's, polytechnics and ITI’s in the national capital to get an educational loan is a game changer that other states should adopt.

Students preparing for courses like CA, ICWA or CFA and even those doing skill development courses specified by the Delhi government can also avail of the educational loan.

To meet the costs of the scheme the state government has set up a Higher Education and Skill Development Credit Guarantee Fund (HESDCGF) for providing guarantees to the banks against any default on these educational loans.

In case of default by the students the HESDCGF will initially settle 75% of the claims of the bank after the initiation of the recovery proceedings and the remaining 25% will be settled after ascertaining the final loss of the bank at the end of the recovery process.

The threat of defaults are to be minimized by making the parents or the legal guardian’s joint borrowers of the educational loan along with the student. 

A default will also negatively impact the credit rating of the student and parents.

The competition among educational institutions to attract more students and the government stipulations for securing accreditation by educational institutions providing admission to students availing educational loans will ensure improvements in quality of education.

The liberal Educational loan in India of the Delhi government, the risks of which are borne by the government, is in line with the practices in advanced countries like Australia, Canada, Denmark, England, France, Germany, Japan, Sweden and United States where the funds are provided by the government to improve student access to higher education.

Source : (http://bit.ly/1m8bu40)

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